Customer Relationships and the Trap of the Familiar

Posted on July 13, 2011 by Eric Engwall Comments Off

Recently, the sidewalk outside of our office building was closed for about ten days due to road construction. On several of those days I drove past the orange cones and barriers to our parking lot and not even two minutes later walked around the corner to take the sidewalk like I always do, as though nothing had changed. Each time I sort of chided myself for my short memory and then crossed to the other side of the street to get to the office. While I knew the sidewalk was closed, I was still operating on my normal unconscious routine until I was confronted by the bright orange barrier that said “Sidewalk Closed.”

One of those mornings I realized that in all the time I’d been walking my route to the office I had never been down that side of the street or seen the building from that vantage point. So, I stopped and looked up toward the spot where our offices are. Because I followed a normal routine I hadn’t appreciated the color of the brick, the architectural nuances or the way the morning sun lit up that side of the very familiar edifice. I really had missed out.

Sometimes our clients have much the same experience when dealing with their customers. The relationships are stable. The people they interact with and their requirements and expectations are familiar. They get into a routine. Sure, from time to time events take place and conditions change, but very often all appears to return to normal. They revert to the comfort and unconscious nature of the familiar pattern. And just like my walk to the office, they miss out on things.

To avoid missing opportunities and failing to see potential threats in customer relationships, consciously change your routine. Look at your customer from a new angle. Just a few simple ideas to avoid the trap of the familiar:

  • The next time you meet with them, ask different questions. Instead of discussing products, deals and problems ask about trends in their market. Inquire about business challenges they anticipate and opportunities they want to pursue. To get at different information, have a different conversation.
  • Be conscious about your routine, and change it up. Consider what you might be missing and do something new to discover something new.
  • Talk to their other suppliers. Compare notes and knowledge with other companies that serve that same customer.
  • Call a contact that’s less familiar to you to build a new relationship, verify what you know, and potentially uncover something useful.

The street repairs outside my office are finished and the sidewalk is open once again. Tomorrow I’m still going to cross to the other side of the street, just to see things from a different perspective.

Business-to-Business Sales, Customer Relationships, Voice of the Customer

Is It About Value or Business Benefit?

Posted on February 11, 2011 by Gary Gerds Comments Off

Business BenefitFor the past 20 years E.G. Insight has been in the business of helping our Global 1000 clients collect feedback from their most valuable customers. Our CRp® customer interview process is a structured face-to-face conversation between one key customer contact and two people from our client’s organization. The overarching goal of the CRp approach is to help our clients discover firsthand how well they are meeting their customers’ current needs and how those needs will change in the future.

One very important question our clients have long asked their customers deals with the issue of value. Typically, the customer contact is first asked how he or she defines value, and then how well or poorly our client is delivering value based on that definition. We often provide prompts intended to provide ways in which the customer could think about value; these prompts include the following:

  • Anticipate your needs
  • Overall relationship with us
  • Leadership
  • Total business solutions
  • Strategies for the future
  • Return on investment
  • Contribute to your success/profitability

Clients want to include the value question because they seldom, if ever, are the low-price provider. Not being the low-price provider forces them to find other ways to differentiate their products or services. They often focus on value as a key differentiator.

Value is always in the eye of your customer. A product or service feature does not really add value unless the customer thinks it adds value. Many organizations devote precious resources to efforts they think enhance value. The key word here is think. Remember, it is not really value unless the customer sees it as value.

Do you know how your customers define value? All too often when the value question is asked, the customer responds with a price/cost answer. Knowing customers think your prices are too high may be interesting, but not particularly helpful, because making significant price reductions is usually not realistic.

There has to be a better way to ask the value question, and we think we have found it. Lately, instead of asking about value, our clients are asking for their customers’ perceptions of the business benefit they are receiving. Framing the question in terms of business outcomes gets customers to think beyond price. Answers to the business benefit question often deal with quality, productivity, safety, sustainability, on-time and on-specification performance.

Asking about business benefit is a better way to really understand what the customer values, a better way to understand how to create competitive advantage and influence the buying process when you are not the low-price provider.

Gary Gerds, Managing Partner
E.G. Insight

Best Practices, Customer Confidence, Customer Feedback, Point of View

Don’t try to “boil the ocean!”

Posted on January 13, 2011 by Gary Gerds Comments Off

As the New Year unfolds, we begin to feel the pressure to improve our lives overnight. Resolutions are made to eat better, exercise more, stress less, and get things accomplished. Unfortunately, we tend to tackle too many goals, overwhelming and exhausting ourselves before measurable progress is made.

Interestingly, companies – like people – do exactly the same thing when responding to customer feedback: try to accomplish too much within too short a time period. They think they can fix everything and address every customer concern, which means little or nothing gets done, and then they lose focus and move on. All too often these companies lack a sense of realism and priority when dealing with customer feedback. Sound familiar?

Larry Bossidy, former CEO of Honeywell and co-author of Execution: The Discipline of Getting Things Done, asserts that execution is everything. Companies that execute well differentiate themselves in the marketplace. Companies that learn to execute effectively know how to focus and thrive. Sounds simple, but in reality it is often hard to accomplish.

Customer feedback is a gift. It is provided by customers who want to see you improve, who want to see you get better – which helps them and you. Effective customer feedback processes provide actionable, detailed information you can use to improve. The problem is this feedback can often send you off in lots of directions simultaneously, like the proverbial chicken with its head cut off. At the end of the day/month/year we have little to show for our efforts.

How do we keep this from happening? How do we execute effectively in response to customer feedback? The answer is to take the time to apply a few simple criteria to all improvement efforts. Start by determining:

  1. Which customer issues have the greatest impact on overall customer confidence and satisfaction?
  2. Which improvements, if made, would affect many rather than just a few customers?
  3. Which issues can you realistically address within a reasonable period of time, with a manageable expenditure of resources? In other words, where can you make a difference?
  4. What are the “critical few?” If more than one or two issues survive the first three questions listed here, which of these does your gut tell you are the most important?

Avoid the temptation to “boil the ocean.” You can‘t do everything at once, as much as you would like to. Force yourself to focus, completing one or two tasks very well. Create action plans for dealing with one or two issues – achieving visible progress will serve to keep individuals interested, invested in the process, and give them a sense of accomplishment.

Don’t forget to keep your customer informed. All too often companies undertake major improvement initiatives but forget to keep their customers informed of what they’re doing and how they’re progressing. Keeping customers “in the loop” – even if open issues are not yet fully resolved – helps reassure them that actions are being taken, provides opportunities for additional input, and perhaps most importantly, prevents them from feeling forgotten.

Gary Gerds, Managing Partner
E.G. Insight

Best Practices, Point of View

Sometimes Little Things Drive
Big Customer Decisions

Posted on December 14, 2010 by Gary Gerds Comments Off

ChandelierA realtor once told me that home buyers often are swayed positively or negatively over very small things. Buyers sometimes reject a house because they don’t like the color of the living room or the carpet in the bedroom. One realtor told me that he sold a very expensive house because the buyers fell in love with its dining room chandelier. A chandelier sold the house!

Now, we can argue that there were other factors at work. It wasn’t just the chandelier that won one sale or the living room paint that lost another. It’s likely there were other considerations that swung the decision positively or negatively – but the paint or the chandelier provided the tipping point, triggering the decision.

Just like home buyers, customers often make large decisions based on a culmination of relatively small things. Some of their calls weren’t returned promptly, so the supplier is seen as unresponsive. Not communicating effectively about delivery issues can become huge irritants for the customer, even though each delivery issue may in itself be relatively minor.

Small things can add up to big things. Each isolated and seemingly insignificant event can become a big deal when a rash of minor issues is viewed in combination.

Taking the time to talk with customers often uncovers the reality that what we see as small things, the customer views as major issues. Customers often raise concerns that can be resolved with one call or the click of a computer key. The point is that we can’t correct what we don’t hear. Making the commitment to talk with your customers enables you to understand and correct issues before they become a big thing.

Here is the question: Are you committed to listening to your customers? Are you prepared to hear about and correct both large and small issues before they become big?

Final question: I just risked my neck standing on a ladder to install a stained glass window in my house. Do you suppose it will help me to attract a buyer?

Gary Gerds, Managing Partner
E.G. Insight

Point of View

Relationship Equity

Posted on November 30, 2010 by Gary Gerds 1 Comment

Kind of a strange term isn’t it? Relationship equity, hmm…

Strong customer relationships can save the day. When problems arise, strong relationships help us get important information, help us to overcome obstacles and mistakes. Strong relationships often help us “win the close ones.” In this day of product and price parity, relationship can be the sole differentiator. The relationships you have with your most valuable customers are the one thing your competitor cannot duplicate.

Stephen Covey popularized the comparison between relationships and bank accounts. In our relationships – as in banking – we make deposits and withdrawals, there are credits and debits. Credits happen when we do good deeds, deliver on promises, prove our dependability, solve a problem, and add value in general. Debits occur when we make a mistake and need to ask for forgiveness. Forgiveness comes much more easily if there is a positive balance in the account.

Most of us spend lots of time and energy managing the personal aspects of our customer relationships. This is a great way to connect to your customer and create credits in the relationship account. Think about your most valuable customer contacts; I will bet you know where your customer lives, where he or she went to school, their marital status, if they have kids, their interests, hobbies, sports, etc. You probably know something about what is important to them personally.

But there are other ways to generate credits – other ways of developing the relationship between your customer and you. Now let me ask you tougher questions:

  • Do you know what your customer contact wants their next job to be?
  • Do you know where they want to go with their career, and what it will take for them to get there?
  • Do you know their professional goals, how they are measured, and the progress they are making?
  • What, if anything, about their job keeps them up at night?
  • Do you know what you can do to help them?

Taking the time to understand and manage the professional side of your customer relationships, as well as those personal connections, can result in success for them and for you. Helping your key contacts achieve professional success often increases the likelihood that you too will be successful and adds credits to your account.

In any complex and long-term relationship, debits are going to happen, withdrawals will be made. Make sure you’re consciously making deposits in that account to both cover your withdrawals and build equity over time. Strong relationship accounts are best created when we pay attention to understanding both the personal and the professional side of our customers.

Gary Gerds, Managing Partner
E.G. Insight

Best Practices, Point of View